What is utility advance fee?Utility advance fee is a fee estimated in advance that the tenant has to pay for the owner monthly in advance together with the rent. The fee includes common expenses, electricity, heating, gas and water and in some cases internet and TV fees. The owner and the tenant get informed of the actual consumption periodically (once or twice a year) according to what the meter shows, and the margin is paid or paid back. Paying the bills is the responsibility of the owner (or an apartment manager entrusted by the owner).
Thus utility advance fee is not the same as the so-called “all inclusive” rent, which is similar, but there’s a crucial difference: in the case of the latter the rent is increased with the utility advance fee, and the actual consumption is not accounted. The owner has to take the risk of a possible overconsumption.
Why is it good for the owner?
All the owners are afraid of unpaid utilities and common expenses, but they don’t want to take care of the payment of the bills every single month.
Unfortunately assigning the name of the tenant to the public utility meters doesn’t provide any guarantee for the owner, since in case of the tenant is not willing to pay, the utility service provider will get in touch with the owner. Trying to get the tenants to pay their debt can take months. If the owner would like to sublet the apartment during this period, they have to pay the tenant’s debt to be able to provide utility services (or get them turned on again if they’ve been turned off). Moreover, in the case of the common expenses it is not possible to assign the name of the tenant to the obligation to pay; the tenant (hopefully) pays common expenses according to the tenancy contract.
Naturally most of the tenants don’t want to get in any trouble, and they pay all bills they have to. It can also happen that the tenant simply forgets to pay the bills. But it’s true that if the tenants are free to decide if they want to pay common expenses in a certain month or would like to pay later, paying common expenses can be easily pushed backwards on the priority list.
Conclusion: utility advance fee provides control for the owner or the apartment manager entrusted by the owner. It gets revealed at once if the tenant doesn’t pay utilities, since the owner or the apartment manager are involved in every payment.
Why is it good for the tenant?
Nowadays almost anything can be paid online, but we still have to take some time every month handling our utility payments. Moreover, it makes our list of tasks we have to take care of longer.
If paying utility fees is the owner’s responsibility, the tenant only has to transfer money to the owner once a month. The tenant neither have to pay attention to the complicated invoices of public utility service providers, only meet the owner once or twice a year to get informed of the actual consumption according to the meter, and pay the margin.
Source: towerbudapest.com
